Multiplying and Dividing Money
There are times when multiplying and dividing money can be useful. For example, if you are buying more than one of the same item, you might want to multiply the price by the number you’re buying to figure out how much you’ll be spending. Also, if you have to split up money between a group of people, you might want to divide the amount of money by the number of people there are, to see how much money each person should get. We’ll go through a couple examples so that you can see how helpful this can be.
Multiplying money can be very useful when you’re buying more than one of the same item. In order to multiply money, you will multiply the amount of money by the number of items (or people, etc.) in order to figure out how much money will be spent overall. When you multiply money, you always put the larger number (the number with more digits) on top, and the smaller number (the number with less digits) on the bottom. Then, you work through it like a normal multiplication problem. Let’s try an example.
Amy goes to the store to buy socks. She finds out that socks are $7.50 per pair, and she needs 11 of them. How much will Amy spend on socks? First, we’ll get our multiplication problem set up, like this:
Then, we’ll work through the multiplication, like this:
Notice that we count over two decimal places to put the decimal in our answer. This makes sense because when we multiply decimals, we count the total number of decimal places in the problem, and then move the decimal point to the left that many places in our answer. Therefore, our final answer is that they would spend $82.50 altogether.
Other times, it may be beneficial to know how to divide money. In order to divide money, you would use the amount of money as the dividend, and the number of ways it’s getting split up (for example, between a certain number of people) would be the divisor. Then, you would set up basic long division (remembering, of course, that the decimal point needs to be put in the answer if needed).
Let’s look at this example problem. Four friends paint an elderly woman’s house for her. She tells them that she will pay them $500 as a group to paint the house. How much will each friend get for painting the house?
First, we would set up a long division problem using $500 as the dividend and 4 as the divisor. It would look like this:
Then, you would complete the division, like this:
Therefore, you can conclude that each friend would get $125 for painting the woman’s house.
Let’s try one more example of dividing with money. Nick went to the store and saw that apples were on sale, 5 lbs for $3.99. How much did the apples cost per pound? First, we would set up a long division problem using $3.99 as the dividend, and 5 for the divisor (because we know that 5 pounds were on sale, but we want to figure out the price for one pound). The division would look like this:
Notice that we added a zero on to our dividend in order to complete the division problem. However, now the answer has three decimal places in it. We know that money can only have two decimal places, not three, so we need to round off our answer to the nearest hundredth. We have a 9 in the hundredths place, and the next digit is an 8. This means that the number rounds up. Since 9 rounds up to 10, we would move our tenths digit up one as well, so we would round this to $ .80. (If this doesn’t make sense to you, please read the section on rounding numbers.)